Apple: $1 billion. Toyota: $1.29 billion. Boom Supersonic: $500 million. Eli Lilly: $1 billion. Thermo Fisher Scientific: $500 million. Pratt and Whitney: $650 million.
North Carolina is winning, and it’s not an accident. In the past 12 years, the General Assembly’s reform majority brought North Carolina’s personal and corporate income tax rates from the highest among our neighbors to the lowest.
A comparison of tax rates between us and our neighbors, 2010-2022
Note: North Carolina’s 2010 tax rates also included a surtax enacted during the Great Recession that increased income tax liability above the statutory rate.
What’s the result? People and businesses are moving here in droves. We’re competing for the top companies in the world and we’re winning.
Naysayers counter that our tax environment has little impact on growth. Such a position flies in the face of basic economics. Companies seek profit; the more they pay in taxes, the less they have to reinvest or distribute to shareholders. Those same naysayers complain about large corporations headquartering in foreign countries to avoid tax liability. Well, either companies make location decisions based on the tax environment or they don’t. It can’t possibly be true that some corporations respond to domestic taxes by headquartering overseas, but other corporations somehow don’t consider a state’s tax code when headquartering there.
And people, like companies, wish to keep the money they earn. They’re fleeing high-tax states and coming to low-tax states like North Carolina, Florida, and Texas in part because they pay lower taxes. A married couple earning $75,000 keeps $2,300 more of the money they make by living in North Carolina compared to New York City. That matters! The tax rate is scheduled to drop even more: it’ll be under 4% by 2026. And the standard deduction — the amount of income that somebody pays no taxes on — is now $25,500 for a couple. Compare that to Georgia’s, which is just $6,000, and Virginia’s, which is just $9,000.
North Carolina is winning, and a big reason why is the pro-economy policies enacted by the reform majority.